Bitcoin experienced a rise of over 6%, reaching $35,198, its highest value since May 2022. The previous day, it had surged by 10%, marking its most significant daily gain in nearly a year, and its price has doubled in the year 2023.
Stocks connected to cryptocurrencies, such as Coinbase Global (COIN.O) and bitcoin holder MicroStrategy (MSTR.O), saw increases in after-hours trading. Additionally, the cryptocurrency ether surpassed the $1,800 mark.
The anticipation of an exchange-traded fund (ETF) that holds bitcoin on behalf of fund investors is seen as a demand catalyst. This is because it provides a way for those who are hesitant to directly trade in the cryptocurrency markets to gain exposure to Bitcoin through the stock market.
Large investment firms like BlackRock (BLK.N) are among several companies with pending applications for Bitcoin-related funds in the United States. Speculation about their probable approval was stoked by the listing of BlackRock’s iShares ETF on the clearinghouse DTCC’s website.
Anticipation has been on the rise, especially following recent reports, including one from Reuters this month, suggesting that the U.S. Securities and Exchange Commission (SEC) will not challenge a court ruling that found its rejection of an ETF application from Grayscale Investments was incorrect.
Steen Jakobsen, Chief Investment Officer at Saxo, emphasized the significance of the ETF by stating, “The value of an asset, whether it’s any asset, essentially relies on the number of people using it. Therefore, an ETF would attract a large audience and enhance liquidity.”
The reasons for the addition of the iShares ETF to the DTCC list, as well as the timing of the inclusion, are not clear at this time. DTCC and BlackRock have not yet responded to requests for comment via phone and email. Additionally, last week, BlackRock refuted an erroneous report that its ETF had been approved, with sources close to the SEC confirming that the application is still pending.
Data from the crypto derivatives analysis site Coinglass showed significant short-covering in bitcoin over the past 24 hours.
This development coincides with concerns in the broader financial markets regarding the potential for the conflict between Israel and the Islamist group Hamas to escalate into a larger regional conflict.
Kyle Rodda, an analyst at Capital.com, also suggested that demand for bitcoin may have been influenced by the ongoing conflict and the emergence of Javier Milei as the frontrunner for Argentina’s presidency. Bitcoin is sometimes considered a store of wealth during times of crisis.
Reported by Tom Westbrook and Rae Wee in Singapore, and Brigid Riley in Tokyo. Edited by Shri Navaratnam